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Unite delegate Suzanne Abachor addressed the TUC today (9 September) on the dangers of “backdoor” NHS privatisation through the setting up of wholly owned subsidiaries.

The union has waged an extensive campaign against NHS trusts creating wholly owned subsidiaries as they could lead to job losses and salami slicing of service provision.

NHS trusts are not allowed to register for VAT exemption, despite competitor companies working for the health service being able to do so.

Speaking in support of a motion on the issue, Abachor said, “Congress – this motion is about calling out wholly owned subsidiaries for what they are really about: NHS privatisation smuggled in through the backdoor.

“Under the pressure of austerity and stretched budgets, NHS trusts are forming these entities so they can compete on a level playing field with their commercial competitors – who can register for VAT exemption when NHS trusts cannot.”

Core members of the NHS family

Abachor said the creation of such firms is resulting in “core members of the NHS family” – who work for the health service as plumbers, fitters, porters and cleaners – seeing their jobs hived off into separate subsidiaries.

“This is what happens when you introduce commercial competition into a publicly run service,” Abachor said.

“All talk of being more ‘commercial’ and ‘sustainable’ boils down to short changing hard working staff and endangering patients.

“But Congress, all these subsidies do is open a Pandora’s Box – exposing the health service to the threat of dozens of Carillion-type meltdowns.”

The consequences of collapse would then be passed down to frontline services and patients, Abachor said.

“These dangerous subsidiaries are simply not the answer to the last eight years of chronic underfunding of the NHS and the parlous finances of many NHS trusts in England,” she said.

“But Congress, the tide is finally turning against these ponzi schemes. NHS Trusts from Leicester to Leeds, Wear Valley to Bristol have all abandoned plans to create wholly owned subsidies for key services – following grassroots pressure from an alliance of unions and patient groups.”